Why Do You Need Workers' Compensation Insurance?
California law requires employers to have Workers’ Compensation Insurance. Even out-of-state employers may need Workers’ Compensation Insurance coverage if an employee is regularly employed in California or a contract of employment is entered into here. All California employers must provide Workers’ Compensation Insurance benefits to their employees under California Labor Code Section 3700. There are five basic types of Workers’ Compensation Insurance benefits – medical care, temporary disability benefits, permanent disability benefits, vocational rehabilitation services, and death benefits. In California, all employers, whether large or small, are required to have coverage for their employees with Workers’ Compensation Insurance. An employee does not have to be full-time, or employed by only one employer for any number of months or days. In addition, there is no need for a written employment contract and employees can include legal and illegal aliens, minors and prisoners. Under certain circumstances; i.e., a home owner, you may be required to have workers’ compensation if you hire someone to perform gardening, maintenance, house cleaning, etc.
How Does Workers' Compensation Insurance Work?
Workers’ compensation is meant to protect both employers and employees should an illness or accident arise while on the job. Each state has its own rules and regulations that employers must follow to ensure that proper coverage will be provided for injured employees.
Employees filing claims for workers’ compensation insurance can only do so if their injury or illness is caused by their duties while on the job. Common examples include injuries that have resulted from a slip or fall, a strain on the body from heavy lifting, or an accident while operating machinery.
How is the Cost of Workers' Compensation Insurance Determined?
Workers' comp insurance premiums are calculated according to how employees are classified (with regards to the specific type of work they perform) and the rate assigned to each employee classification. The premium rate itself is expressed as dollars and cents per $100 dollars of payroll for each class code
RATE X (PAYROLL / 100) X Experience Modifier = PREMIUM
What is Pay as You Go for Workers' Comp Insurance?
Pay as you go workers' compensation allows you to make premium payments each time you run payroll. Your workers' comp insurance liability is spread out throughout the year. Traditional workers' comp plans require large lump sum payments to cover the estimated cost of your liability.
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